I am happy to be here, and I am very pleased to introduce the people with me from the Department of Foreign Affairs and International Trade. They are:

Jonathan Fried, who is Assistant Deputy Minister, Trade and Economic Policy;
Kathryn McCallion, Assistant Deputy Minister of Corporate Services, Passport, and Consular Affairs;
Louise Charron-Fortin, Director General of the Trade Commissioner Service Planning and Policy; and
Doreen Steidle, who is Director General, Corporate Finance, Planning and Systems Bureau.

These professionals will be able to help me respond to any of the more specific questions or comments the members of this Committee might have concerning our activities.

So, if you will allow me, I will make a few introductory remarks before we go to those questions and comments.

I am sure you will agree that the Estimates of the Department of Foreign Affairs and International Trade [DFAIT] are full of interesting numbers and statistics. But I want to draw your attention to one striking graphic on page 14 of Part III of the Estimates, which is very important to all our discussions.

What this graphic shows is that Canada is, per capita, the largest trading nation of the G-7. The figure in the book is from 1998, when our exports were 41.3 percent of gross domestic product [GDP]. In 1999 our combined goods and services exports increased by 9.7 percent to a total of $409.8 billion -- or 43.2 percent of GDP!

These numbers compare to only 25.7 percent of our GDP just a decade ago, roughly where most of the European countries are today, to 11 percent for our largest trading partner, the United States (proportionally four times less than Canada) and to 15 percent for Japan (proportionally, a little more than a third of what Canada does).

Our merchandise exports reached over $360 billion in 1999 -- up nearly 12 percent over the previous year. In the same period, our service exports jumped up over 7 percent. These are the highest growth rates we have seen since 1994.

At the same time, our imports of goods and services also grew by 9.7 percent -- up from 5.8 percent the previous year.

On the investment side, the story is even more dramatic. The stock of foreign direct investment in Canada jumped by 9.5 percent in 1999 to reach $240 billion, representing a vote of confidence on the part of foreign investors in the continuation of our strong economic performance. More investment in this country means we benefit from new technologies, new production processes and most important, new jobs. Eleven percent or 1 in 10 jobs in Canada directly depend on foreign direct investment and nearly 20 percent more are indirectly tied to it. As the Prime Minister said recently, over the past 7 years, nearly 2 million new jobs have been created in this country.

And a large percentage of those new jobs have been created through trade. Today, more than one third of all jobs in this country are trade related.

So, with these types of numbers, it is only natural that the Government of Canada -- as you can see in the DFAIT Estimates document -- devotes a great deal of attention and resources to increasing opportunities abroad for Canadian companies and encouraging investment in Canada, both by working relentlessly on a bilateral and multilateral basis to help create a better rules-based international trading system and by providing direct assistance to Canadian exporters in foreign markets.

What these figures show is that if protectionism arises around the world again, as it has done regularly in the history of humanity, we have a lot more to lose than many others.

So, Canada needs a rules-based international trading system and, as a government, we are completely committed to helping build a better, more secure and more predictable system.

At the same time, we will continue to encourage more Canadians firms -- particularly small and medium-sized businesses, and those headed by women, Aboriginal Canadians and young people -- to capitalize on the opportunities available in foreign markets.

Earlier today, I released a report called Opening Doors to the World: Canada's International Market Access Priorities, which sets out some specific goals for us.

It mentions our ongoing work at the World Trade Organization [WTO], for example, not only in participating in the so-called "built-in" discussions on agriculture and services that started earlier this year, but also in working to help get the overall dialogue back on track.

We have a vested interest in helping to make sure that the talks on agriculture go well. Canadian farmers are suffering because of subsidies paid to the agricultural sectors of many of our trading partners. Strong progress on agriculture would be a powerful incentive to begin a broader-based round of negotiations a year or so down the road; broader negotiations, in turn, would help the agriculture talks.

We are pushing for change within the organization itself to make sure it stays relevant and focussed on trade issues.

It is a more complex discussion because WTO membership has grown significantly in the past 15 or so years, from about 90 members to 135. China and others are poised to join.

The Department is also concerned with upholding Canada's rights and obligations under existing trade rules of the WTO, NAFTA [North American Free Trade Agreement] and in our bilateral trade and investment agreements with several other countries.

We have taken the lead in developing regional trade agreements with the European Free Trade Association, in our trade agreements with Chile and Israel, with APEC [Asia-Pacific Economic Cooperation forum] and with our hemispheric partners on the Free Trade Area of the Americas [FTAA].

And, on the FTAA, I want again to congratulate and thank the members of this Committee for producing an excellent and thorough report and giving us recommendations on what Canada's position should be in the negotiations.

With over 800 million people and a combined GDP of over $11 trillion, a free trade agreement in our hemisphere would constitute the largest single free trade area in the world.

Your recommendations are nearly identical to the government's approach to a hemispheric agreement while also pursuing our goal of more open markets around the world.

In addition, we have a long list of other ongoing activities to help our own businesses. For example, we are:

• Adapting the services provided by the international network of Trade Commissioners to keep pace with the rapid changes in international business and the evolving needs of the Canadian business community.

• Creating a single point of access to trade support throughout Canada via Team Canada Inc, a network of 22 government departments augmented by partnerships in all regions of the country. Team Canada missions led by the prime minister will also continue to be an important vehicle for fostering federal-provincial co-operation and promoting Canadian business interests abroad.

• Strengthening trade promotion in strategic sectors with high export potential such as environmental industries and information technology, and continuing support for innovation and technology in leading export sectors such as agriculture, agri-food and natural resources to develop markets beyond the United States.

• Finding new markets for new products developed through university and government research centres.

• Launching Investment Team Canada to co-ordinate efforts by all levels of government and the private sector to promote foreign direct investment in Canada.

• Building greater public understanding of the economic benefits of trade and investment and of Canadian trade policies through outreach activities in Canada.

• Implementing and managing our existing trade agreements, including 24 relating to the WTO alone. It seems incredible to me, but the number of WTO meetings rose from 800 to 1700 annually between 1994 and 1998!

• Representing Canadian interests in the growing number of disputes that is a by-product of rules-based trade. For example, in 1995 there were two disputes involving Canada under the WTO and NAFTA. In 1999 there were 24.

As I mentioned, protectionist legislation and other actions, in the United States and other countries, remain a constant threat, and we will continue our efforts to try to resolve these situations before they cause disruptions.

The last year has been an extremely busy one for me and for the Department.

One of the first things I did after being sworn in was to travel to Mexico for a bilateral meeting with my counterpart there to discuss NAFTA, the FTAA and other issues.

Last fall, I had the privilege of hosting the FTAA Ministerial in Toronto, where we agreed to adopt measures to streamline customs procedures and increase the transparency of government rules and regulations on trade and investment across the hemisphere.

Let me take a moment to discuss how the government is engaging civil society groups. (By the way, I do not like the term civil society. It makes me wonder into where we parliamentarians fall: 'uncivil' society? We are all members of civil society: politicians, public servants, the private sector and NGOs of many different stripes. We are all citizens trying in our own individual ways to improve the society in which we live.) But I digress. I will use the nomenclature that is in use.

Since Canada assumed the chair of the negotiating process of the FTAA, the government has undertaken to consult closely both formally and informally with Canadian civil society NGOs. Formally, we chaired the civil society consultation group for the FTAA. Through this group we implemented and co-ordinated the hemispheric consultation process. Although the mandate for the committee has been renewed, it would not be a surprise to anyone here that the Government of Canada would like to see more progress on this front.

That being said, to me, the informal consultations really worked. They can serve as a model for governments on how to involve various non-governmental groups in the process of negotiating government to government.

Several times a year since the Santiago Summit, DFAIT officials met with a coalition of NGOs grouped together under the umbrella "Common Frontiers." The Department's officials continually dialogue with them on the status of the hemispheric discussions. I have personally met with them in the past and will do so again. These were very productive discussions. We were able to roll up our sleeves and share our perspectives and, whenever possible, reach a common understanding. We do not always agree, but the process has been fruitful.

The formal and informal links provided me and Department officials with a solid understanding of the concerns raised by civil society groups. It was precisely the good relationship that we have established here in Canada that led me to convince my hemispheric counterparts to join me in meeting with the hemispheric civil society groups. At the Toronto meeting, a record 22 countries joined me in meeting with civil society groups at their People's Summit! Before the Toronto meeting, only five countries had ever met with these groups! This is a step in the right direction.

In Seattle, we continued the process. Every morning we held a briefing not only for the official Canadian delegation but also for Canadian NGOs who were present in Seattle. We shared information on what was being discussed and dialogued on matters of concern. A small anecdote: as the meeting ended, half of the room would get up to go to the convention centre to attend the sessions; the other half would get up to take their positions outside the convention centre to protest the deliberations! This was a truly Canadian moment!

All in all, the Government of Canada -- following your sage recommendations -- is taking steps to consult with all sectors to help Department officials promote the kind of trade Canadians want, as well as to demystify the trade negotiation process.

We also had a very successful Team Canada mission to Japan, which helped open doors for Canadian business and also allowed us the opportunity to lobby for further reform and deregulation of the Japanese financial services sector.

We had the WTO Ministerial in Seattle that received so much publicity around the world! And, in spite of all the negative reports, I believe those talks will get back on track in the not too distant future.

In fact, I travelled to Washington and New York shortly after Seattle to meet with my American counterpart for discussions on our next approach and how to get things going again.

I also went to Paris, Davos and London for several strategy meetings on trade, as well as to promote our interests in those areas.

This was followed by a visit to Uruguay, Chile and Argentina, where I met with several government ministers and business people, including Canadians, to encourage more contacts and exchanges and to move along the process of tariff reduction and other issues.

Over the coming months there will be a trade mission to Australia and the APEC Trade Ministers Meeting, as well as the Canada-European Union Summit in Portugal, the Intergovernmental Economic Commission meeting in Russia, and a trade visit to Central Europe.

In closing, I must also mention that the activities undertaken by DFAIT are a direct reflection of the excellent work performed by the Department's employees, not only here in Canada, but also in over 130 of our missions abroad. You may actually be familiar with some of them as there have been recent newspaper articles on the issue of contract negotiations between foreign service officers and Treasury Board.

While I cannot comment on ongoing negotiations between the employer and the employee, I can confirm the value of these employees and commend them for their professionalism in often difficult working environments. They have brought their concerns to my attention, as well as that of my colleague Minister Axworthy, and we are supportive of the need to bring both sides to the table to negotiate a settlement. In addition to its foreign service officers, the Department is committed to all its staff, rotational and non-rotational, and conscious of the need to improve its employment equity percentages for women, Francophones and the disabled. A human resources strategy has been developed to improve the working conditions of all the Department's employees.

I hope this brief snapshot will help the members of this Committee better appreciate the activities of the Department, and I look forward to your questions and comments.

Thank you.

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Last Updated: 2006-10-30	Top of Page	Important Notices